NH House Passes Amended Bill To Exempt VC Businesses From Money Transmitter Registration
On March 8, 2017, the New Hampshire House of Representatives passed an amended version of House Bill 436 (“HB 436”) with a vote of 185-170. HB 436 was originally introduced on January 5, 2017, by Republican Representatives Barbara Biggie and Keith Ammon to amend New Hampshire’s Licensing of Money Transmitters statute (Chapter 399-G of the New Hampshire Revised Statutes) to specifically exempt businesses engaged in virtual currency transactions. The bill was amended in committee on February 16, 2017.
Currently, Chapter 399-G requires virtual currency businesses, such as exchanges and wallets, to obtain a money transmitter license as the statute covers businesses transacting in virtual currency (defining “money transmission” to include “Receiving currency or monetary value for transmission to another location;” and defining “monetary value” to include “convertible virtual currency,” which is also a defined as “a digital representation of value that: (a) Can be a medium of exchange, a unit of account, and/or a store of value; (b) Has an equivalent value in real currency or acts as a substitute for real currency; (c) May be centralized or decentralized; and (d) Can be exchanged for currency or other convertible virtual currency”).
The bill, as originally introduced, would have (1) re-defined “money transmission” to include “maintaining control of virtual currency on behalf of others;” (2) included a definition of “virtual currency” as “a digital representation of value that can be digitally traded and functions as a medium of exchange, a unit of account, or a store of value but does not have legal tender status as recognized by the United States government;” and (3) added “Persons conducting business using transactions conducted in whole or in part in virtual currency” to the list of exemptions.
While in the House Commerce and Consumer Affairs Committee, the bill was amended. As Chapter 399-G already defines “convertible virtual currency,” the amended bill adds “persons who engage in the business of selling or issuing payment instruments or stored value solely in the form of convertible virtual currency; or receive convertible virtual currency for transmission to another location” to the list of exemptions. The amended bill further states that “[s]uch persons shall be subject to the provisions of RSA 358-A,” New Hampshire’s consumer protection statute.
If enacted, HB 436, as amended, will benefit virtual currency start-ups and small businesses as they are currently required to obtain a money transmitter license, and satisfy the various obligations for money transmitter businesses (including capital requirements and reporting/recordkeeping requirements). Virtual currency-related businesses will still be subject to the New Hampshire Regulation of Business Practices for Consumer Protection statute. The bill will next be considered by the New Hampshire Senate.